BORROWING AUTHORITY: DEFINITE AND INDEFINITE

EFFECTIVE FISCAL 2022

BORROWING AUTHORITY: DEFINITE AND INDEFINITE

EFFECTIVE FISCAL 2022

BORROWING AUTHORITY: DEFINITE AND INDEFINITE	  

EFFECTIVE FISCAL 2022

PREPARED BY:

GENERAL LEDGER AND ADVISORY BRANCH

FISCAL ACCOUNTING OPERATIONS

BUREAU OF THE FISCAL SERVICE

U.S. DEPARTMENT OF THE TREASURY

Contents     	Background	4Scenario 1:  Definite Borrowing Authority	5Scenario 2:   Indefinite Borrowing Authority Liquidated by an Appropriation from the General Fund	33

Version Control

BORROWING AUTHORITY: DEFINITE AND INDEFINITE

EFFECTIVE FISCAL 2022

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                               IRC Handout July 7, 2021	

# Background

Borrowing authority is a type of budget authority that permits obligations and outlays to be financed by borrowing. Usually, the law authorizing the borrowing specifies that you must borrow from the Treasury, but in a few cases, it authorizes borrowing directly from the public. Laws usually authorize borrowing for business-like operations. Such laws require the program to repay the borrowing, with interest, out of business proceeds.[footnoteRef:1] In rare instances, usually based on an appropriation or authorizing language, an agency may use an appropriation to liquidate obligations that were initially incurred against authority to borrow when the borrowing was not exercised. [1:  OMB Circular No. A-11, paragraphs 20.3 and 20.4] 

Borrowing authority is composed of two authority types:

· *Definite borrowing authority*, where a law provides a specific amount of authority that cannot be exceeded.  Authority is realized at the beginning of the program and carried forward until the authority is rescinded, completely consumed, or until the program is terminated, whichever comes first.  

· *Indefinite borrowing authority*, where the amount of authority is not pre-determined and authority is available as needed to cover obligations incurred.   

# 

# Scenario 1:  Definite Borrowing Authority 

This scenario includes entries to satisfy the basic transactions for definite borrowing authority.  This scenario represents 2 years of activity.    

The following accounts will be used in this scenario.  Refer to the U.S. Government Standard General Ledger for accounts, account descriptions, accounting transactions and crosswalks reports (https://tfm.fiscal.treasury.gov/v1/supplements/ussgl/ussgl_part_2.html#Part5).  In addition, each transaction in the scenario is coded with transaction code (TC) numbers identified in Section III of the USSGL TFM Supplement. 

Listing of USSGL Accounts Used in This Scenario

Definite Borrowing Authority – Year 1

Scenario Assumptions:

· The GTAS BEA Category Indicator attribute for illustration purposes is mandatory.

· This is no year TAS.

· The Apportionment Category Code attribute for illustration purposes is Category B.

Definite Borrowing Authority – Year 1

Definite Borrowing Authority – Year 1

Definite Borrowing Authority 

Pre-Closing Trial Balance

 Year 1

Definite Borrowing Authority – Financial Statements - Year 1

Definite Borrowing Authority – Financial Statements - Year 1

Definite Borrowing Authority – Financial Statements - Year 1

Definite Borrowing Authority – Financial Statements - Year 1

Definite Borrowing Authority – Financial Statements - Year 1

Definite Borrowing Authority – Reclassified Financial Statements - Year 1

Note: Effective FY 2021, the Reclassified Balance Sheet is the same as the Balance Sheet.  Therefore, the Reclassified Balance Sheet is not presented in this scenario.

Definite Borrowing Authority Closing Entries – Year 1

.

Definite Borrowing Authority 

Post-Closing Trial Balance

 Year 1

Definite Borrowing Authority – Year 2

Definite Borrowing Authority – Year 2

Definite Borrowing Authority – Year 2

Definite Borrowing Authority – Year 2

Definite Borrowing Authority 

Pre-Closing Trial Balance-Year 2

Definite Borrowing Authority – Financial Statements - Year 2

Definite Borrowing Authority – Financial Statements - Year 2

Definite Borrowing Authority – Financial Statements - Year 2

Definite Borrowing Authority – Financial Statements - Year 2

Definite Borrowing Authority – Financial Statements - Year 2

Definite Borrowing Authority – Reclassified Financial Statements - Year 2

Note: Effective FY 2021, the Reclassified Balance Sheet is the same as the Balance Sheet.  Therefore, the Reclassified Balance Sheet is not presented in this scenario.

Definite Borrowing Authority Closing Entries – Year 2

Definite Borrowing Authority Closing Entries – Year 2

Definite Borrowing Authority 

Post-Closing Trial Balance - Year 2

# 

# Scenario 2:   Indefinite Borrowing Authority Liquidated by an Appropriation from the General Fund

This scenario includes entries to satisfy the basic transactions for indefinite borrowing authority. This scenario represents 2 years of activity.  For indefinite authority at year end, the agency will adjust the unobligated balances to zero and the unused funds must be reapportioned each year.

The following accounts will be used in this scenario. Refer to the U.S. Government Standard General Ledger for accounts, account descriptions, accounting transactions and crosswalks reports (https://tfm.fiscal.treasury.gov/v1/supplements/ussgl/ussgl_part_2.html#Part5). In addition, each transaction in the scenario is coded with transaction numbers identified in Section III of the USSGL. 

NOTE: See Credit Reform Scenarios, for entries specifically related to borrowings for loan disbursements. 

https://www.fiscal.treasury.gov/ussgl/resources-creditreform.html

Listing of USSGL Accounts Used in This Scenario 

Indefinite Borrowing Authority – Year 1  

Scenario Assumptions:

· The GTAS BEA Category Indicator attribute for illustration purposes is mandatory.

· This is no year TAS.

· The Apportionment Category Code attribute for illustration purposes is Category B.

Indefinite Borrowing Authority – Year 1

Indefinite Borrowing Authority – Year 1

Indefinite Borrowing Authority 

Pre-Closing Trial Balance Year 1

Indefinite Borrowing Authority – Financial Statements – Year 1

Indefinite Borrowing Authority – Financial Statements – Year 1

Indefinite Borrowing Authority – Financial Statements – Year 1

Indefinite Borrowing Authority – Financial Statements – Year 1

Indefinite Borrowing Authority – Financial Statements – Year 1

Indefinite Borrowing Authority - Reclassified Financial Statements – Year 1

Note: Effective FY 2021, the Reclassified Balance Sheet is the same as the Balance Sheet.  Therefore, the Reclassified Balance Sheet is not presented in this scenario.

Indefinite Borrowing Authority Closing Entries – Year 1

Indefinite Borrowing Authority 

Post-Closing Trial Balance - Year 1

Indefinite Borrowing Authority – Year 2

Indefinite Borrowing Authority – Year 2

Indefinite Borrowing Authority – Year 2

Indefinite Borrowing Authority 

Pre-Closing Trial Balance Year 2

Indefinite Borrowing Authority – Financial Statements – Year 2

Indefinite Borrowing Authority – Financial Statements – Year 2

Indefinite Borrowing Authority – Financial Statements – Year 2

Indefinite Borrowing Authority – Financial Statements – Year 2

Indefinite Borrowing Authority - Reclassified Financial Statements – Year 2

Note: Effective FY 2021, the Reclassified Balance Sheet is the same as the Balance Sheet.  Therefore, the Reclassified Balance Sheet is not presented in this scenario.

Indefinite Borrowing Authority Closing Entries- Year 2

Indefinite Borrowing Authority Closing Entries- Year 2

Indefinite Borrowing Authority Closing Entries- Year 2

Indefinite Borrowing Authority 

Post-Closing Trial Balance

 Year 2

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